Here & Now

Budget Watch: Transportation

Zac Schultz:

Catching a Metro ride bus in the Wausau area can be a difficult thing. In his last budget Governor Walker cut state aid to transit and aid to local municipalities. Local governments had to cut somewhere and they started dropping out of Metro Ride.

Greg Seubert:

We had three southern neighbors who, one by one, opted out of our program.

Zac Schultz:

Metro Ride had to cut 30% of their bus service and 50% of their para-transit service for the disabled. In the village of Weston, a group of citizens organized a referendum demanding the return of some limited bus routes.

Greg Seubert:

It passed overwhelmingly by almost two to one.

Zac Schultz:

This was no super liberal bunch. The referendum was held June 5, 2012, and those same voters in Weston overwhelmingly voted for Scott Walker in his recall election. The voters in Weston wanted bus service.

Greg Seubert:

The village went to referendum again asking to increase the tax rate in order to pay for transit services and that referendum failed.

Zac Schultz:

They just didn’t want to pay for it.

Greg Seubert:

The conflicting referendums really reflect our politics today.

Scott Walker:

Overall, we make a $6.4 billion investment in our transportation infrastructure in this budget.

Zac Schultz:

Governor Walker’s proposed transportation budget is similar to his last one, but both Democrats and Republicans are concerned it includes too much borrowing and does not deal with serious problems facing the transportation fund.

Dave Hansen:

The transportation budget at $6.4 billion is a reach.

John Nygren:

We have issues with the level of bonding, but what are our alternatives? We either cut projects or we increase revenue.

Zac Schultz:

There’s little debate among observers, the transportation fund needs more revenue. In Wisconsin, it’s funded primarily through the gas tax and vehicle registration fees. In his last budget, Governor Walker created the Transportation Finance and Policy Commission, a bipartisan panel that included public and private sector members. Earlier this year, the TFPC issued a report that called for an increase in the gas tax and driver’s license fees, and a change to mileage-based registration fees, all of which would add up to an extra $480 million a year. Republican leaders shot down the recommendations even before the official report was released.

Scott Fitzgerald:

I don’t think there’s an appetite for a gas tax increase right now.

Zac Schultz:

Governor Walker did not include any of the recommendations in his budget, and the Joint Finance Committee is not talking about it either.

John Nygren:

I think it’s the principle for the governor. He’s not looking for any kind of tax increase or fee increase.

John Klenke:

In the end, each one of those proposals was a tax increase.

Zac Schultz:

Democrat Dave Hansen explains why the governor is ignoring his own commission’s recommendations.

Dave Hansen:

Because they’re all political losers.

Craig Thompson:

Those are real life decisions. If they’re losers, then we’re in trouble.

Zac Schultz:

Craig Thompson is the executive director of the Transportation Development Association, an advocacy group. Thompson was also a member of the TFPC and says the report was not a wish list.

Craig Thompson:

We did not take a pie in the sky view of this. We looked at what is it going to take to basically maintain the system that we have now, and make sure it doesn't deteriorate more.

Robb Kahl:

Just like anything else, you have to pay for it.

Zac Schultz:

Robb Kahl was appointed to the commission while he was mayor of Monona. Since then he’s won a seat in the assembly as a Democrat and wants to make sure the warnings in the report are not ignored.

Robb Kahl:

I'm here to tell people, we have a big problem in our transportation fund, and we have to figure out how to fix it.

Zac Schultz:

The main way Governor Walker deals with it in his budget is through bonding, borrowing nearly $1 billion over the next two years. Half of that will be used to pay for major reconstruction projects in southeast Wisconsin, including $300 million to continue rebuilding the zoo interchange in Milwaukee.

Luther Olsen:

Well, it’s a lot of bonding, and if you look at what’s going to happen if we keep bonding at this rate, a lot of the new money will go to pay off old projects and so there will be no new projects.

Zac Schultz:

The nonpartisan legislative fiscal bureau reports debt service will eat up 18.5% of the transportation budget by the end of the biennium and it'll keep rising as the bonding continues in future budgets.

Craig Thompson:

Big picture, we do need to look at our bonding.

Zac Schultz:

Transportation advocates like Craig Thompson fear what increased borrowing will mean for future budgets.

Craig Thompson:

Biennium after biennium, this is a way of financing. It's not a way of funding. We’re going to have to find a sustainable way to fund it or debt service will begin to eat up more and more of the budget.

Zac Schultz:

The bonding in this budget is the second highest in the last decade, but Governor Walker says the level is appropriate.

Scott Walker:

For some in the legislature we’re almost victims of our success two years ago, that we’re still less than where Jim Doyle was four years ago both in overall spending in our Capital Budget and in overall bonding.

Zac Schultz:

But not all of this bonding will impact the transportation budget down the road. That’s because $200 million of the zoo interchange project will be paid back with general purpose revenue. The same dollars that fund the schools, Medicaid and state government. Governor Walker has a proposal to pay down some of that road debt right away by selling off state property.

The surplus property the governor wants to sell includes pieces like this one. It’s located along highway 151 just outside Sun Prairie. It was acquired in 2003 as part of a road project and has been sitting vacant for more than a decade. Now, the state obviously knows it’s here and they’re trying to sell it, but the purpose of this budget item is to find other pieces like it around the state and make sure when they’re sold, the proceeds go to pay off road debt.

John Nygren:

I think you'd be surprise at the amount of land that the state owns.

Zac Schultz:

But many people fear the property the governor is actually targeting includes power plants, like the Charter Street heating plant which provides heating and cooling to the UW campus.

Bruce Braun:

It’s absolutely nuts. I think even this concept of selling the plants itself is crazy.

Zac Schultz:

Bruce Braun is retired now, but at one time he served as the assistant vice-chancellor at the University of Wisconsin. He says selling the plants would cost the state money in the long run because the university would have to buy back the heating and cooling services from the new owner.

Bruce Braun:

It would be a short-term gain, but it’s almost impossible to imagine anybody doing it cheaper than the state. The state doesn’t have to earn a profit, they don’t have to pay taxes.

Zac Schultz:

There are 37 similar plants at universities, prisons and buildings around the state. In 2011, Governor Walker tried to get the authority to sell the plants as part of a no-bid contract, but the legislature rejected that idea. Under this sale, the university will be left to pay for future heating and cooling needs out of their own budget, while the proceeds go toward road debt.

John Nygren:

The overall sale, obviously, is being used to fund the challenge we face today.

Zac Schultz:

While Governor Walker won’t raise fees or taxes to increase transportation revenue, he is finding other ways to free up money. In the second year of the budget he’s removing transit funding from the transportation budget. That leaves an extra $106 million for roads, but leaves transit operators wondering how they’ll compete against schools and prisons for funding.

Greg Seubert:

My guess is that all of the programs within that general fund are going to get a smaller piece of the pie.

Dave Hansen:

It’s going to have to compete with everything else, every other priority in the budget, and it could mean the end of transit funding, at least from the state level.

Scott Walker:

The funding’s got to be there either way, so whether it’s competing in one pot or the other, the fact of the matter is funding is still stable. They should be appreciative of that. Where it comes from is all part of the larger debate about priorities.

Zac Schultz:

Governor Walker’s last way of adding to the transportation fund is to transfer it out of the general fund, $93 million over the next two years. In a budget where the governor offers public schools no increase in funding, Republican Luther Olsen says those transfers are wrong.

Luther Olsen:

You got to bite the bullet and raise some more revenue rather than shifting it from someplace else that now doesn’t get the– get the revenue that it needs.

Zac Schultz:

Members of the Transportation Finance and Policy Commission say this budget does not begin to address the problems they have found.

Craig Thompson:

It really doesn’t do anything to move us forward with solving our overall funding mismatch that we have long-term.

Robb Kahl:

What I’m seeing is not a solution to our problem. It’s kicking it down the street for two more years, where it will only grow worse.

Zac Schultz:

But Republicans say the conversation has started.

John Nygren:

I’m hoping over the next few sessions we’re going to have the ability to continue this discussion, actually come up with solutions.